Maaaaaaaaaaaaaaaaan I’ve been waiting a long time to say that :) Seriously, we try every 5-6 months and always heard back “No,” “No,” and “Hellllll No!” Haha… and damn understandable too. We’re $60k+ underwater!!! I wouldn’t let myself refi either.
But you know who did? Chase!! The same bank that already HAS our 1st mortgage, which is the craziest part of the whole thing in my opinion. And what’s even sillier is that THEY called US to see if we had considered it before? I honestly thought someone was trying to scam us. I kept asking them questions to see if they were legit (they were), but it was pretty damn weird. When does a financial institution call you to SAVE YOU MONEY?? Doesn’t make sense, does it?
I didn’t think so either, but the rep said they were pretty much trying to keep my business. They knew I’d be looking to refi if I hadn’t already (which is funny cuz I had *just* given up for the year), and they had some good offers on the table to make us stay with them, rather than move elsewhere. Which, of course, I then tried to do cuz I was like “If Chase is saying I can refi and THEY don’t care about my underwater-ness, or the fact our income isn’t *as* stable anymore, then maybe others won’t either? Yeah! Let’s call them up and tell them the deal we got, and have them bid for our business! I am sooooo smart!!!” Haha…
Yeah. Didn’t go down that way. Everyone pretty much laughed in my face, just like they had done the previous FIVE TIMES I’ve called them over the last 4 years, and basically told me I’d be an idiot not to take them up on their offer. And that they probably have much more leeway cuz they’re already holding the loan I wanna refi (our 1st mortgage, not our 2nd. Which is with USAA, and whom I also called thinkin’ could be of help – which actually came kinda close, but also kinda not once they realized the details of our situation ;) I swear though, one of these days!!!)
So. That’s the quick story of how I got from nowhere, to somewhere, in the last 30 days. And to be honest, up until Friday when I physically signed the paperwork (and live tweeted it!), I still didn’t believe it was all true. In fact, I’m still afraid something will pop up and slap me in the face!!! But after talking with each party to the transaction, multiple times, AND reading most of the paperwork (who reads every single word, right?? that would be nutt balls) everything seems to have checked out a-ok. And even cooler was seeing my LLC name on all the loan docs which ties to this blog :)
4 years ago we were sitting in this exact same spot, about to make the life-changing decision of being home owners for the first time, and I had no clue what I was getting myself into. All I could think of was not having to pay rent anymore, and coming home to a house we didn’t pay a single dollar for yet. Not even at closing – everything was comped and we didn’t even have or need a down payment. It’s pretty insane looking back, esp that it brought us to where we are today. 4 years later, as a full-time blogger about money!! What a difference :) And why I can never take back that single, spur of the moment, decision I sometimes curse when I make those mortgage payments. It sure stings like crazy, but it made me who I am today. And I owe my happiness to it!!!
Whew, that was a lot to get out. Only took me 15 mins to type though! Haha… that’s what passion and excitement does to ya ;)
Okay, so what does this new refinance look like?
Well, here’s our old 1st mortgage:
- Chase Bank
- 6.875% (fixed)
- 30 year INTEREST-ONLY mortgage
- Monthly payments of roughly $1,917.96
- Zero toward principal, other than the extra I threw against it every now and then
Our NEW 1st mortgage:
- Chase Bank
- 5.5%!!!! (fixed)
- 30 year CONVENTIONAL loan!
- Monthly payments of almost exactly the same amount: $1941.42
- Roughly $320 paid toward principal every month!!!
- 1 and 1/2 months until our 1st payment is due, giving us $2k to do something with.
- Closing costs of roughly $5,000 – which will be “paid off” in a little over a year. (Unless we apply that $2k “saved” towards it. Then, 9 months.)
How’s that for a clean getaway? We drop almost 1 1/2 interest points, get our loan upgraded from “interest only” to “conventional” – AND keep almost identical mortgage payments?!!! MAN that is exciting. Even though we had to pay $5k to close the deal! Haha… but it all goes back to that same long-term game plan of creating wealth. You do it over months and months and years of time, not right at this moment. You put plans into effect that will come back to help you in the future. Sturdy, trusty deals which you can rely on 100% over choosing what’s “best” for you TODAY.
That guy 4 years ago who signed that original loan? He was living in the here and now. There was no such thing as a budget or planning for the long term – there was just today. Just that “perfect house” he wanted to hurry up and move into with his then-fiance and start a new life together. The American Dream that he was now apart of – just like all his friends. He was so excited to call back home and give the good news to mom & dad! Life was good being naive. Rainbows and sunshine everywhere :)
Don’t be like that old J$, okay? He still may be one crazy mother f’er up in here, but when it comes to owning a home he’s come to realize it’s certainly no joke. Learn from his stupidness and always do your research when it comes to making huge choices – especially the biggest ones of your life! It’s not as fun or exciting (or even quick, for that matter) but it’s much better to find out what you’re getting into sooner, rather than later. I just thank the high heavens we can still AFFORD this
mistake decision of ours! I’d like to bitch and moan about not getting the lowest rate out there right now (I think it’s 4-something%?) but I feel like we just dodged a bullet years in the making. And for that, I am eternally happy.
Now… on to figuring out what to do with that “extra” $2,000 laying around ;)
PS: I never thought I’d say it, but Amortization is sexy too!!!
(Photo by jelene)
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!